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Detroit's $8 million payout was too much

City's $8 million payout was too much

In case you're not sufficiently irked at the $8 million check Detroit wrote to make amends for the mayor's juvenile behavior, consider this:

Logic and lawyers suggest the payout would have ordinarily been maybe half that size.

The logic part of the equation was mine, but I didn't spend three extra years on campus learning to be analytical. To make sure I was reading the numbers correctly, I called Sam.

More precisely, I called on Sam, and I mostly talked to his sons. Sam's people can also help if you've encountered bad drivers, bad doctors, bad bosses, bad products or numerous other bad things. In my case -- not looking to pick a fight with Mayor Kwame Kilpatrick, but simply answering my question -- they confirmed what appears to be a bad deal, made in direct contradiction to the concept of a "settlement."

Backtracking briefly, a jury awarded $6.5 million in September to two former police officers who said they were fired for poking into the alleged shenanigans of the mayor's security team. That was the lawsuit in which the mayor and Christine Beatty, his chief of staff until last month, denied under oath the affair in which they had enthusiastically indulged in several time zones.

The mayor vowed to appeal. Instead, five weeks later, he announced that he was settling the police officers' suit for $8 million and paying $400,000 to dispense with a separate suit from a third officer.

The lawyers for the mayor and the first two officers agree that with interest, the meter on the jury verdict had hit $7.9 million. The city paid $100,000 more than that. But why wasn't the check written for $3 million, or $3.6 million, or $4 million and a set of Ginsu knives?

The answer is obvious. The mayor can go on the radio and claim the checks went out before he cut his secret agreement, but he was covering his tracks, and he leaves a very large footprint.

How settlements are made

A settlement is typically a midpoint. The jury awards $6.5 million. The winning lawyer tells his clients not to go boat-shopping just yet, because he knows what the losing lawyer is going to say: Accept $3 million, or we'll tangle this in appeals until the Lions win a Super Bowl.

The winners make a counter-offer. The lawyers call each other names for a while, then agree on a number. Rather than wait, or risk a reversal, the winners accept less than what the jury gave them.

Here, the city declined to exercise its only leverage. The winners received the original award, plus interest, plus a lovely parting gift of $100,000. The losers, building in an excuse but not explaining why, inserted language in the agreement that said the parties settled for significantly less than the payout might have been.

"It's very odd," says Mark Bernstein, "that you would settle for more than the jury award."

"I've never seen it happen," Richard says.

"Unless," Mark says, "there was new information that could come out in a subsequent proceeding."

Like, for instance, text messages that showed the mayor had lied about his affair and had probably fired a cop he denied sacking.

"They already had their money," the mayor told WMXD-FM (92.3), "when we signed the confidentiality agreement." The dates on the checks contradict him, and so does the dollar amount. Blowing $6.5 million in a cash-strapped city is bad enough. Blowing the city's only opportunity to cut its losses compounds the irritation.

The judicial climate in Michigan, Mark says, would have been balmy at the appellate level. Our Supreme Court sides almost universally with employers, as opposed to whistleblowers, and the lower court follows the varsity's lead.

"We are widely seen as a plaintiffs' graveyard," he says. Once you've won a judgment, you avoid an appeal as best you can.

It's a rare set of clients who get handed more than they won in the first place, but then, the mayor is a rare public figure. The only thing this mess has cost him is credibility, and he doesn't seem to put much value in that.

Reach Neal Rubin at (313) 222-1874 or nrubin@detnews.com.

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